Fiscal & Monetary Policy Design for Sustainable Development and Climate Action

Small states are at the frontline of escalating climate risks that endanger lives, damage critical infrastructure, and undermine long-term economic stability. These challenges are further compounded by limited fiscal space, high external debt, and constrained access to affordable finance, which restrict their ability to adapt and build resilience. This proceedings report captures the key insights, deliberations, and policy recommendations from the closed-door roundtable on Macroeconomic Resilience in Small States: Fiscal and Monetary Policy Design for Sustainable Development and Climate Action, held on 24 June 2025 in London and co-hosted by auctusESG and the Commonwealth Secretariat.

Bringing together policymakers, economists, development practitioners, and subject-matter experts, the discussion focused on innovative approaches to strengthening macroeconomic resilience, including the integration of climate risk into fiscal frameworks while safeguarding debt sustainability, the deployment of monetary policy instruments to support financial stability and countercyclical responses, and the mobilisation of climate finance to scale up investment in sustainable development.

The report also underscores the importance of international cooperation, knowledge-sharing, and capacity-building tailored to the unique vulnerabilities of small states. By synthesising diverse perspectives and real-world experiences, it aims to provide practical guidance for policymakers and stakeholders seeking to advance sustainable development, promote macroeconomic stability, and unlock climate action in these disproportionately affected nations.